Indians are fond of gold like no other nation. But, Gold is often acquired through illegal means, either innocently or intentionally. This often spells trouble for people preserving it. Income Tax department is very watchful on this front. Whenever, gold is purchased from disclosed income via legal channel, there is nothing to worry. Also, if you have inherited gold from your previous generation, that too is OK with the IT department. However, in such cases, you should be able to prove that the gold you possess is genuinely inherited. The onus lies on you.
There are 6 ways to prove the legal inheritance of gold in the family:
1) Wealth Tax Receipt : Wealth Tax was applicable in India until 2014-15. The tax was payable on assets value if they were worth Rs 30 Lakhs or more. So, if you have been holding gold for more than that value, you must have filed Wealth Tax returns. You should keep the tax return receipt handy to prove that you have been disclosing your assets.
2) Inheritance through a Will : If your previous generation was wise enough to pass on the gold assets through a will, they have made your job easy. You can produce a copy of the Will for proof of inheritance.
3) Gift: If the gold has been received as a gift, you should obtain a Gift-deed as proof.
4) Independent Valuation: If the value of gold has been less than the wealth tax limit, then you should be obtain a valuation certificate from a government / income tax department approved valuer to prove that the your holding was not liable for taxes.
5) Family photographs: Old family photographs often come handy to show that a particular piece of jewellery was originally owned by the previous generation.
6) Home Insurance Policy: Always insure your house. While applying for the policy, disclose the amount of gold that you hold. Keep the old policies and application forms for record sake, as it becomes a paper trail of tenure of ownership of gold.
Income Tax officer will assess the situation basis the proof you provide. However, as per current rules, no seizure of gold is allowed if it’s a case of 500 gms of gold held by a married woman. If it is more than that, the family may be required to prove income levels ain alignment with the amount of gold held.